Business need

  • West Africa based investment and brokerage firm
  • A member of West African Regional Stock Exchange (BRVM)

Business Objectives / Goals

  • The client wanted to initiate coverage on a leading telecom company based in West Africa, to cater to its foreign clients that wanted to invest in the telecom sector in this region
  • It asked RocSearch to forecast the company financials and value the equity, providing target price and investment advice (Buy/Sell/Hold)

Approach and Methodology

  • The team adopted a top-down approach, developing an understanding of the trends in the company, sector and the economy
  • A detailed revenue model for the company was prepared after identifying the drivers; and then, the major line items were forecasted based on our expectations
  • Also, a valuation model was prepared based on a combination of DCF and relative valuation approaches
  • Presented our analysis in a comprehensive report, clearly outlining our investment rationale and associated risks

Business outcomes

  • The company in focus performed in line with our major forecasts and appreciated significantly in the subsequent months, vindicating the BUY rating that we had assigned to the stock

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